Reporting from Washington
American International Group's move comes after selling its holdings in MetLife. About $59 billion from the Troubled Asset Relief Program still is invested in the insurance giant.
The Treasury Department has recovered 70% of the money distributed under the $700-billion bailout fund after insurance giant American International Group Inc. paid back $6.9 billion of the taxpayer bailout it received.
The once financially ailing AIG made the repayment Tuesday after selling its holdings in MetLife last week. About $59 billion from the Troubled Asset Relief Program still is invested in AIG.
Altogether, AIG received about $125 billion in a complex, multistep bailout from the Treasury and the Federal Reserve starting in the fall of 2008. The government owns 92% of AIG after a stock-conversion deal in January. That was part of an effort to recapitalize the insurance company and make it easier to unwind the federal stake later.
Outside the TARP money, the Fed has about $39 billion invested in AIG.
The stock-conversion deal was completed after the Congressional Budget Office estimated in November that the Treasury would lose $14 billion in TARP money on the AIG bailout. But the deal and a rise in AIG's stock price gave the Fed and Treasury Department confidence to predict that they would not lose any money.
For taxpayers to break even on the 1.655 billion shares of AIG common stock they now own, they would need the stock to reach a price of $28.72 a share. Tuesday's closing price for AIG stock was $37.31, but the government would need to sell its shares over a long period.
AIG's repayment brings to $287 billion the total TARP money recovered, the Treasury Department said. Although Congress put $700 billion into the fund, the department disbursed only $411 billion.
"We're optimistic that as we continue to wind down TARP, our temporary investments in private companies will ultimately result in little or no cost to taxpayers," said Tim Massad, the Treasury official who oversees TARP.
The Congressional Budget Office estimated in November that TARP would lose $25 billion. The White House has estimated a $48-billion loss. But with the potential profit from the AIG stock, the projected loss would drop to $28 billion.
American International Group's move comes after selling its holdings in MetLife. About $59 billion from the Troubled Asset Relief Program still is invested in the insurance giant.
The Treasury Department has recovered 70% of the money distributed under the $700-billion bailout fund after insurance giant American International Group Inc. paid back $6.9 billion of the taxpayer bailout it received.
The once financially ailing AIG made the repayment Tuesday after selling its holdings in MetLife last week. About $59 billion from the Troubled Asset Relief Program still is invested in AIG.
Altogether, AIG received about $125 billion in a complex, multistep bailout from the Treasury and the Federal Reserve starting in the fall of 2008. The government owns 92% of AIG after a stock-conversion deal in January. That was part of an effort to recapitalize the insurance company and make it easier to unwind the federal stake later.
Outside the TARP money, the Fed has about $39 billion invested in AIG.
The stock-conversion deal was completed after the Congressional Budget Office estimated in November that the Treasury would lose $14 billion in TARP money on the AIG bailout. But the deal and a rise in AIG's stock price gave the Fed and Treasury Department confidence to predict that they would not lose any money.
For taxpayers to break even on the 1.655 billion shares of AIG common stock they now own, they would need the stock to reach a price of $28.72 a share. Tuesday's closing price for AIG stock was $37.31, but the government would need to sell its shares over a long period.
AIG's repayment brings to $287 billion the total TARP money recovered, the Treasury Department said. Although Congress put $700 billion into the fund, the department disbursed only $411 billion.
"We're optimistic that as we continue to wind down TARP, our temporary investments in private companies will ultimately result in little or no cost to taxpayers," said Tim Massad, the Treasury official who oversees TARP.
The Congressional Budget Office estimated in November that TARP would lose $25 billion. The White House has estimated a $48-billion loss. But with the potential profit from the AIG stock, the projected loss would drop to $28 billion.
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